Gulf lease bids exceed $1.2 billion

Gulf lease bids exceed $1.2 billion

WASHINGTON —The federal government received Wednesday more than $1.21 billion in high bids for oil-and-gas drilling leases in the central Gulf of Mexico off the coasts of Louisiana, Mississippi and Alabama.

The lease sale at the Mercedes-Benz Superdome in New Orleans represented the second straight sale that did not include BP, which is suspended from purchasing Gulf leases by the Environmental Protection Agency because of the 2010 Deepwater Horizon incident.

The British corporation could have made bids Wednesday, but BP’s suspension would have to be worked out with the EPA during the 90-day bid review timeframe.

Wednesday’s lease sale offered nearly 39 million acres of the Outer Continental Shelf in the Gulf. More than 50 energy companies submitted 407 bids on 320 tracts, covering more than 1.7 million acres, according to Bureau of Ocean Energy Management Director Tommy Beaudreau. The distances bid on offshore ranged from three to 230 nautical miles offshore and the water depths ranged from 9 feet to more than 11,115 feet deep.

Beaudreau’s bureau estimated the areas available for sale could result in the production of up to 890 million barrels of oil. He said the day produced an “extremely successful and extremely robust” lease sale.

But Beaudreau also noted that oil corporations are making fewer bids and focusing more on certain areas, which is partially because of newer geographic surveying.

“What we’re going to see is intensified interest in particular exploratory areas,” he said.

In November, the federal government took in nearly $134 million in high bids during a smaller western Gulf of Mexico oil-and-gas lease sale. But a much larger eastern Gulf lease sale in June generated $1.74 billion in high bids.

Outgoing Interior Department Secretary Ken Salazar also attended. He said some previous lease sales were larger because “there was a lot of pent-up demand” in the wake of the drilling moratorium after the BP oil leak.

Beaudreau praised the Gulf of Mexico as a “cornerstone” of President Barack Obama’s “all-of-the-above” energy production strategy. Domestic energy production has increased during each of Obama’s years in office, but critics complain the increases are because of greater production on private property rather than federal leases.

Rep. Steve Scalise, R-Jefferson, was quick to praise the lease sale while also criticizing the president.

“(Wednesday’s) sale is a positive step, but it’s unfortunate that the president is still shutting off other areas of America’s OCS,” Scalise said in a prepared statement. “As we’ve seen with today’s lease sale, increased domestic energy development provides not only millions of good American jobs, but it will also provide hundreds of millions of dollars for states like ours where we will use it [to] restore our eroding coast.”